Nov 20th, 2013 @ 9:36 PM by Amber Nelson
The Millennial generation – those aged 19 to 29 – are not borrowing as much as their predecessors but those who are taking on debt are not managing it well, according to a new study by Experian.
Millennials carry an average of only 1.5 credit cards compared with 2 cards a piece for Generation X borrowers (those aged 30 to 46) and 2.7 cards each for Baby Boomers (aged 47 to 65). And Millennials’ credit card balances are also lower with an average of $2,700 than the national average of $4,500. Of course this lower level is due largely to lower credit limits and smaller incomes, but even so, total credit card borrowing among this group has been trending downward over the past five years.
However, those who are choosing to rack up debt are not making timely payments, and Millennials have the lowest average credit score among all age groups as a result. With an average score of 628, Millennials trailed Generation Xers with a score of 653, and were well below Baby Boomers who had an average score of 700.
“While this study looked at all four generations, we found that Millennials are in need of the most guidance to improve and build their overall credit health,” said Michele Raneri, vice president of analytics, Experian in a press release.
The decreasing use of credit cards, poor credit scores and delinquent debt among Millennials nationwide may mostly be attributed to high unemployment and accompanying restrictive credit standards. Without a secure job market, young adults are unwilling or unable to make major purchases.
Credit trends do vary greatly across the country. Millennials in the South and the South West had the worst credit scores, with Mississippi posting the very lowest average of 590. On the opposite end, Minnesota’s young adults had the highest average score in the nation with 660.About Amber Nelson
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.